The Australia Insurance Report Provides Independent Forecasts and Competitive Intelligence...

The Australia Insurance Report Provides Independent Forecasts and Competitive Intelligence on Australia's Insurance Industry

DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c88343) has announced the
addition of "Australia Insurance Report 2008" to their offering.

Since the deregulation of Australia's financial services sector
began in late 1983 two themes have been constant. The first is that
the authorities, specifically the Australian Prudential Regulatory
Authority (APRA), the government and, for banks, the Reserve Bank of
Australia have encouraged participation by foreign companies. The
over-riding philosophy has been that the customers - and possibly the
market participants themselves - will benefit from the competition.

The second theme is that, for any financial services institution
that is involved with the distribution of, or management of the
investments held by organised savings vehicles, there has been a large
and growing pool of assets for which to compete. That pool of assets
consists of Australia's superannuation funds (essentially private
pension plans). As of mid-2007, the superannuation funds held assets
of AUD1, 153bn (US$1,000bn): coincidentally, this is approximately the
same as Australia's annual GDP. Over the previous 12 months, the funds
had expanded by 25% in Australian dollar terms. This was partly
because of the performance of global financial markets and partly
because of contributions.

All Australian employers make a compulsory Superannuation
Guarantee (SG) Levy payment to their workers' superannuation funds.
Currently the SG Levy is 9% of income. For the insurance sector as a
whole, the effect of the first theme has been brutal competition,
involving entrenched local players and Australian subsidiaries (and
sometimes joint ventures) of global multinationals. In the US and the
larger economies of Western Europe, insurers often seek to offset
competitive pressures by developing their businesses in new, and
sometimes distant, markets or by operating as composite insurers (i.e.
with substantial non-life and life businesses) in order to reap
economies of scale.

In Australia two of the three largest non-life firms are expanding
into new markets. However, the country does not lend itself for
substantial inwards or outwards cross-border selling of insurance (or
other financial services), in part because of location, in part
because of cultural differences vis-a-vis other countries that are
promising markets in the Asia-Pacific region and in part because of
its tax regime. Realising the scale benefits of operating as a
composite insurer is difficult because, relative to other rich
economies, Australia is only medium-sized.

This means that there really are no composite insurers. Companies
typically have a strong position in non-life, or in life, but not
both. Some 45% of the non-life segment is in the hands of two local
players, each of whom is the result of a series of demutualisations
and acquisitions. In the rest of the segment, most players focus on
particular niches in which they believe that they have a competitive
edge. Through 2006, competitive pressures were such that the non-life
insurers collectively had to pass onto their customers much of the
benefit of lower claims. In H107 conditions became tougher.

Gross premiums have been growing by around 2% annually or by a lot
less than nominal GDP. The growth of superannuation has the greatest
implications for the life segment. In spite of the wealth and
financial sophistication of Australia, life insurance premiums are
still growing at double-digit rates. This is because life insurance
products are used by and within superannuation funds which, as noted
above, have been expanding in part because of the SG Levy
contributions. In some countries pensions are in competition with
insurance. This is absolutely not the case in Australia. The linkages
between superannuation and life insurance mean that the biggest
players are the local financial services groups which combine strong
local brands with distribution power and, usually, a bancassurance
offering. ING, through its relationship with ANZ Banking Group, is the
only large multinational to take advantage of this. As is the case in
the non-life segment, most life players are relatively small niche
operators.

Content Outline:

The Sector At A Glance

Table: Overview Of The Australian Insurance Sector

Key Insights On The Insurance Sector Of Australia

SWOT Analysis

Australia Insurance SWOT

Key Features Of This Report

Latest News

Table: Analysis By Lines (AUDmn)

Projections And Forecasts

Table: Premiums - Historical Data And Forecasts, 2005-2012

Projections And Drivers Of Growth

Table: Growth Drivers

Country Update

Macroeconomic Outlook

Table: Australia - Economic Activity

Political Update

Insurance Business Environment Ratings

Table: Australia - Insurance Business Environment Indicators

Table: Insurance Business Environment Rankings

Regional Context

Table: Non-Life Premiums In A Regional Context, 2007

Table: Life Premiums In A Regional Context, 2007

Table: Comparison Of Major Lines As % Non-Life Premiums, 2006

Analysis Of Competitive Conditions

Australia - Non-Life Segment

Table: Australia's Non-Life Segment By Company - Gross Written
Premiums In 2006 (AUDmn)

Table: Presence Of Cross-Border Insurers, Non-Life

Australia - Life Segment

Table: Presence Of Cross-Border Insurers, Life

Methodology

Basis Of Projections

Insurance Business Environment Rating

Table: Insurance Business Environment Indicators And Rationale

Table: Weighting Of Indicators

For more information visit
http://www.researchandmarkets.com/reports/c88343

Research and Markets
Laura Wood, Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com

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